The federal government has proposed a major increase in the charges required to restore taxpayer status on the Federal Board of Revenue’s (FBR) Active Taxpayers List (ATL). The move is part of the Finance Bill 2026 and aims to encourage taxpayers to file their income tax returns on time.
Under the proposed amendments, the fee for individuals seeking to regain their ATL status after missing the tax filing deadline will rise significantly. The current surcharge of Rs. 1,000 is expected to increase to Rs. 25,000. This represents a 25-fold increase, or 2,400 percent.
The decision comes as the Govt Increases efforts to improve tax compliance and reduce the number of late filers. Officials believe that the existing surcharge is too low and does not effectively discourage delayed tax return submissions.
The proposed changes are not limited to individual taxpayers. Associations of Persons (AOPs) will also face higher charges. Their ATL restoration fee is set to increase from Rs. 10,000 to Rs. 50,000. Similarly, companies may be required to pay Rs. 100,000 instead of the current Rs. 20,000 to regain active taxpayer status.
The ATL is maintained by the FBR and includes taxpayers who submit their income tax returns within the required deadline. Those who fail to file on time are removed from the list. As a result, they become subject to higher withholding tax rates on several transactions.
These transactions include banking activities, vehicle registration, property purchases, and foreign travel. Taxpayers currently have the option to restore their ATL status by filing overdue returns and paying a relatively small surcharge.
However, the Govt Increases these charges to make late filing more costly. According to the Finance Bill, the revised fee structure is designed to strengthen tax discipline and improve revenue collection across the country.
If approved by Parliament, the new charges will take effect from July 1, 2026. Individuals, businesses, and other taxpayer categories will then face substantially higher costs for restoring their ATL status after missing filing deadlines.
The Govt Increases ATL restoration fees at a time when tax reforms remain a key focus of economic policy. Supporters of the measure argue that it will encourage timely compliance, while critics may raise concerns about the financial burden on taxpayers.
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For now, the proposal awaits parliamentary approval before becoming part of the country’s tax framework for the next fiscal year.
